Australia’s biggest superannuation administrator, Superpartners, has pulled the plug on a bungled project to build a new technology platform, which had blown its budget by at least $180 million and been delayed by four years.

Superpartners’ owners, retirement funds AustralianSuper, HOSTPLUS, HESTA, MTAA and Cbus, ordered the program – known as spRIGHT – be ­suspended during a detailed assessment of alternate options.

The ill-fated project kicked off in 2008 as the core part of a broader upgrade initiative known as nextGEN. Its aim was to develop a core registry platform, which would replace eight existing platforms and run the accounts of 4.7 million members. It was due to be completed in early 2010 for $70 million.

But late last year only one small super fund, the Aust (Q) scheme, had put ­member accounts on the system, and the costs had exceeded $250 million. Superpartners, posted a $7.4 million loss on revenues of $257 million for the 2012-13 financial year, after being forced to take a $20.4 million impairment charge relating to the information technology project.

Superpartners called in consultants
Booz & Co
as “transformation partner" to support the company in finalising the nextGEN technology systems. Further work was stopped as alternative options were sought from new suppliers.

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A spokesman for AustralianSuper told The Australian Financial Review the fund, and the other four shareholder funds, had ordered the spRIGHT program be suspended while a detailed assessment of alternate options was conducted.

“We have decided to do this in the interest of good process and good governance because our requirements have necessarily evolved with our scale and also the regulatory changes that have taken place over the last few years. Together, the shareholder funds are considering a range of options. We’ve requested Superpartners dedicate the time, rigour and resources to supporting our assessment."

Fresh proposals

The Financial Review understands the Superpartners board was evaluating two fresh proposals – a joint ­offering from IBM and super industry specialist Link Group and one from Indian technology vendor Tech Mahindra.

Sources said Link was already serving other super clients with a better system than the one Superpartners was building.

The news is a big loss for
Tata Consultancy Services
, which was the primary systems integrator on the core systems replacement project.

Superpartners spokeswoman
Melissa Le Mesurier
said TCS would continue to support it on a “few discreet IT projects".

She said some aspects of the nextGEN program had been completed, including a new customer relationship management platform, a business intelligence portal and a system to connect Superpartners to an external clearing house.

“Work on the core registry spRIGHT is suspended, while our shareholders consider options about our future technology path," Ms Le Mesurier said. “We cannot comment on the options being considered by our shareholders but we continue to support them with their deliberations."

Superpartners has added two executives with extensive technology experience to its board in the last year. as it sought to regain control of its tech spending.

Former Australia and New Zealand Banking Group chief operating officer David Cartwright joined last June and former Insurance Australia Group tech chief David Issa was appointed in January.

IBRS technology advisor
Sue Johnston
said it appeared Booz & Co had expressed concerns on the value of the finished system, and doubts it could be delivered.

“The question needs to be asked: what were the governance arrangements? Were there clear go-no-go criteria established upfront? How much information was provided to the board?" she said.

“The law does not excuse lack of accounting knowledge when making board members accountable for reviewing the financial performance of an organisation. Perhaps it should be the same for technology investments given the enormous impact failure can have on the organisation’s viability."